The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

Former Corby adviser questioned in Bali

A former adviser to Schapelle Corby who was allegedly caught with bullets in his luggage says he hadn't used his bag for a long time and used to do "firing exercises" with a Bali police chief.

Australian man Vasudevan Rasiah, who is working as a property developer in Bali, worked with Corby's legal team as a "consultant" following her arrest in 2004.

The 64-year-old was held at Denpasar International Airport on Wednesday after a security official allegedly found six .32 calibre and five .22 calibre bullets housed inside a hard, black case in his luggage.

He was on his way to Malaysia at the time.

After questioning Mr Rasiah on Thursday, Denpasar Police Detective Chief Reinhard Habonaran Nainggolan said the property developer claimed he had not used the bag for a long time.

"He said that once he had firing exercises with Klungkung police chief (in Bali). We need to dig deeper in to this. We have searched his house and found nothing.

"Up to now, he's still being investigated to make sure whether there is a criminal element or not."